Regardless of the shortened three-day trading week, the bear market continued in Dubai with the Dubai Financial Market General Index (DFMGI) falling 88.39 or 3.31 per cent to end at 2,580.27. This is the second week in a row where the index fell more than 3.0 per cent. There were only five positive issues, while 30 declined. Weekly volume fell given the shorter week. For the year, the index has fallen 23.4 per cent, and it is down 31.2 per cent from its 2017 peak of 3,738.69.
Of greater significance than last week’s performance however, is the fact that the DFMGI has not only closed below the prior long-term swing low support of 2,590.72 from January 2016, but it has closed below it on a weekly basis. As the index fell last week there was no sign of support at the 2016 lows. This is contrary to the clear support seen in 2016 as the index quickly turned higher back then and moved into a sustained rally. Technically, last week’s action is long-term bearish a continuation of the decline that began off the 2014 highs has been triggered. Therefore, the possibility of an acceleration in downside momentum has increased. Further, any chance for a recovery has been extended into the future as there is no sign of a bottom.
Looking back at previous price action, there may first be some degree of support seen around the monthly price area of 2,409. That’s where resistance was seen at the peak from October 2009 and now it may be a support area. Nevertheless, there is no further evidence for the potential significance of that price zone and therefore it is not likely an area that will hold for the long-term.
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